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Income statement differences for service, merchandiser

Would a traditional income statement differ depending on whether the business is a service organization, merchandiser, or manufacturer?

Could we use managerial accounting "tools" to assess the profitability of an organization other than a manufacturing business, or are the topics we are learning only related to manufacturing?

If we could use these concepts in service and/or merchandising businesses, how would we go about doing so?

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Would a traditional income statement differ depending on whether the business is a service organization, merchandiser, or manufacturer?

Yes, it would differ in one respect - whether it had cost of goods sold. Merchandising (like Ace Hardware) and manufacturers (like Tyson Chicken) will have cost of goods sold since they sell a product. Service firms (like Google) will not have this cost or a subtotal for gross profit. Otherwise they are similar.

Could we use managerial accounting "tools" to assess the profitability of an organization other than a manufacturing business, ...

Solution Summary

Your response is 293 words and shows how managerial techniques can be used in retail and service firms. Examples are given.

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